Standard Grain

Joseph Vaclavik is the president at Standard Grain in Chicago. Standard Grain provides futures and options brokerage to farms, feedlots, elevators, processors, end-users and traders. Visit www.standardgrain.com for more information.

Up Overnight, Planting to Continue After Cold Snap...

Apr 11, 2012

·Grains mostly higher overnight after yesterday’s sell-off; Soybeans rallying to new highs in yesterday’s session before selling off to close lower on the day; Nearby corn contracts trading into support via the trading range from March 30th report

·USDA report mostly a non-event yesterday; Gov’t leaves corn balance sheet completely unchanged from March while making modest changes to the soybean and wheat S&Ds; World carryout numbers fell across the board

·May wheat posting a downside key reversal yesterday; Despite being a good technical indicator historically, these patterns have not seen follow-thru in many situations during the last few years

·Outside markets strong today after pressure yesterday; Equities seem to have found some footing while crude oil found support near the $100 mark; US$ lower

·Freezes widespread in northern Corn Belt and Wheat areas today and tomorrow; Most areas near and north of I-80 from NE through OH at risk; Corn and wheat markets certainly not viewing this as a threat based on market action

·Planting conditions continue to be a bearish factor for the corn market; Dry, warm weather to be seen again this weekend; Although some areas are “too” dry, the fact is that the crop will be planted early and without any major issue

·Export Sales tomorrow morning

We look for old crop corn contracts to find support near current levels. Trade may quickly realize once again that despite yesterday’s WASDE numbers, there is certainly an issue regarding old crop corn stocks. May corn is now trading within the range traded on March 30th; a range may find some end-user and speculative buying. We’re not sure that the highs have been seen in soybeans. Reversal patterns have often not seen follow-thru as of late. Still, the market is long overdue for a technical correction.